22

Apr

MSP (Minimum Support Price)

What is MSP?

MSP is short for Minimum Support Price. It is set by the Indian government for selected crops to ensure that farmers are able to make profit with them. It is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). Currently 23 crops are affected, which make up nearly 90% of India's cultivated area.

The government also offers the farmers procurement of their crops at MSP prices. By this policy the government wants to guarantee farmers a remunerative business. Still, they are free to sell their products also at the open market.

There are two ways to implement MSP. Either the state or central government procures commodities in a physical way or the farmers get a cash payment for the difference between the MSP and the money they got for their crops.

What are the current MSPs in 2021?

This table shows MSPs of the past and present fixed by the Indian government.

Current Minimum Support Prices - Fixed by Government (Rs.quintal)

Crop (Type)

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

2016-2017

2017-2018

2018-2019

2019-2020

2020-2021

Kharif Crops

Paddy (Common)

1000

1080

1250

1310

1360

1410

1470

1550

1750

1815

1868

Paddy (Grade 'A)

1030

1110

1280

1345

1400

1450

1510

1590

1770

1835

1888

Jowar Hybrid

880

980

1500

1500

1530

1570

1625

1700

2430

2550

2620

Jowar Maldandi

900

1000

1520

1520

1550

1590

1650

1725

2450

2570

2640

Bajra

880

980

1175

1250

1250

1275

1330

1425

1950

2000

2150

Maize

880

980

1175

1310

1310

1325

1365

1425

1700

1760

1850

Ragi

965

1050

1500

1500

1550

1650

1725

1900

2897

3150

3295

Tur (Arhar)

3000

3200

3850

4300

4350

4625(2)

5050(3)

5450(2)

5675

5800

6000

Moong

3170

3500

4400

4500

4600

4850(2)

5225(3)

5575(2)

6975

7050

7196

Urad

2900

3300

4300

4300

4350

4625(2)

5000(3)

5400(2)

5600

5700

6000

Cotton Medium Staple

2500

2800

3600

3700

3750

3800

3860

4020

5150

5255

5515

Cotton Long Staple

3000

3300

3900

4000

4050

4100

4160

4320

5450

5550

5825

Groundnut

2300

2700

3700

4000

4000

4030

4220(4)

4450(2)

4890

5090

5275

Sunflower Seed

2350

2800

3700

3700

3750

3800

3950(4)

4100(4)

5388

5650

5885

Soyabean Black

1400

1650

2200

2500

2500

-

-

3050(2)

3399

3710

-

Soyabean Yellow

1440

1690

2240

2560

2560

2600

2775(4)

-

-

-

3880

Sesamum

2900

3400

4200

4500

4600

4700

5000(2)

5300(4)

6249

6485

6855

Nigerseed

2450

2900

3500

3500

3600

3650

3825(4)

4050(4)

5877

5940

6695

Rabi crops

Wheat

1120

1285

1350

1400

1450

1525

1625

1735

1840

1925

1975

Barley

780

980

980

1100

1150

1225

1325

1410

1440

1525

1600

Gram

2100

2800

3000

3100

3175

3500(1)

4000(2)

4400(5)

4620

4875

5100

Masur (Lentil)

2250

2800

2900

2950

3075

3400(1)

3950(5)

4250(4)

4475

4800

5100

Rapeseed & Mustard

1850

2500

3000

3050

3100

3350

3700(4)

4000(4)

4200

4425

4650

Safflower

1800

2500

2800

3000

3050

3300

3700(4)

4100

4945

5215

5327

Toria

1780

2425

2970

3020

3020

3290

3560

3900

4190

4425

-

Further Crops

Copra Milling

4450

4525

5100

5250

5250

5550

5950

6500

7511

9521

9960

Copra Ball (Calender Year)

4700

4775

5350

5500

5500

5830

6240

6785

7750

9920

10300

De-Husked Coconut (Calender Year)

1200

1200

1400

1425

1425

1500

1600

1760

2030

2571

2700

Jute

1575

1675

2200

2300

2400

2700

3200

3500

3700

3950

4225

MSP calculation

The CACP calculates the prices based on a bunch of factors summed up in three definitions A2, A2+FL and C2. A2 includes the costs farmers have to incur on seeds, fertilizer, staff and other actual paid-out expenses. A2+FL also considers an imputed value of unpaid working family members. C2 covers A2+FL and adds rental value of owned rent and fixed capital assets.

CACP claims that the MSP will be set at levels of one and a half times the production costs. For this calculation only A2+FL costs are used. C2 costs serve as benchmark reference costs, by which the committee wants to see if at least in the main producing states these costs can be covered with the recommended MSP.

List of MSP calculation factors:

  • demand
  • supply
  • price trends & price fluctuations
  • production cost
  • different costs and international market prices
  • agricultural wage rate

MSP Crops list

Currently there are 23 different crops, which are fixed by an MSP. These are the following:

  • Cereals:
    Paddy, Wheat, Maize, Sorghum, Pearl millet, Barley, Ragi
  • Pulses:
    Chickpea / Gram / Gramme, Tur, Moong, Urad, Lentil
  • Oilseeds:
    Peanut, Rapeseed, Soyabean, Sesame, Sunflower, Safflower, Niger seed
  • Commercial crops:
    Copra, Sugarcane, Cotton, Raw jute

MSP of Wheat 2021

The Minimum Support Price for wheat is currently at Rs. 1,975

Over the last ten years MSP for wheat has been constantly increasing. Although growth has stagnated over the last few years.

MSP Development for Wheat

Here’s a table with the history of MSP for wheat:

Year

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

2016-2017

2017-2018

2018-2019

2019-2020

2020-2021

MSP

1120

1285

1350

1400

1450

1525

1625

1735

1840

1925

1975

MSP Wheat News

Here’s what the news say about MSP Wheat:

MSP Wheat on Youtube

Here’s what Youtubers say about MSP Wheat:

MSP of Paddy 2021

The Minimum Support Price for Paddy is currently at Rs. 1868 (Common) or Rs. 1888 (Grade ‘A’).

During the Karif season in 2019-20 MSP for Paddy (Common) was Rs. 1,815 and Paddy (Grade ‘A’) was Rs. 1,835. Both increased over Rs. 53 in the Karif season 2020-21. With projected costs KMS of Rs. 1,245 the return over cost is 50%.

MSP Development for Paddy

Here’s a table with the history of MSP for wheat:

Year

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

2016-2017

2017-2018

2018-2019

2019-2020

2020-2021

Paddy (Common) MSP

1000

1080

1250

1310

1360

1410

1470

1550

1750

1815

1868

Paddy (Grade 'A) MSP

1030

1110

1280

1345

1400

1450

1510

1590

1770

1835

1888

MSP Paddy News

Here’s what the news say about MSP Paddy:

MSP Paddy on Youtube

Here’s what Youtubers say about MSP Paddy:

MSP Links

Helpful links with resources on the Minimum Support Price in India: